Commission File Number: 0-8656 |
Delaware | 13-2635899 | |
(State or other jurisdiction of Incorporation or organization) | (I.R.S. Employer Identification No.) |
Large Accelerated Filer o | Accelerated Filer o | |
Non-Accelerated filer o (Do not check if a smaller reporting company) | Smaller Reporting Company x |
Page
Number
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Part I. | Financial Information: | ||
Item 1. | Financial Statements: | ||
Condensed Consolidated Balance Sheets – August 31, 2012 and May 31, 2012
|
3 | ||
Condensed Consolidated Statements of Operations – For the three months ended August 31, 2012 and 2011 | 4 | ||
Condensed Consolidated Statements of Equity – For the three months ended August 31, 2012 and 2011 | 5 | ||
Condensed Consolidated Statements of Cash Flows – For the three months ended August 31, 2012 and 2011 | 6 | ||
Notes to Condensed Consolidated Financial Statements | 7 | ||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 11 | |
Item 4. | Controls and Procedures | 14 | |
Part II. | Other Information | 14 | |
Item 2(c). | Unregistered Sales of Equity Securities and Use of Proceeds | 14 | |
Item 6. | Exhibits | 15 | |
Signatures | 15 |
ASSETS
|
August 31,
2012
|
May 31,
2012
|
||||||
(Unaudited) | (Note 1) | |||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 4,945,854 | $ | 7,514,749 | ||||
Certificates of deposit and marketable securities
|
3,257,131 | 520,672 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $193,000
|
8,589,671 | 8,728,669 | ||||||
Other receivables
|
2,582 | 2,742 | ||||||
Prepaid expenses
|
97,687 | 97,742 | ||||||
Prepaid and recoverable income taxes
|
136,098 | 96,518 | ||||||
Deferred income taxes
|
86,000 | 86,000 | ||||||
Total Current Assets
|
17,115,023 | 17,047,092 | ||||||
Equipment and leasehold improvements, net of accumulated depreciation
|
||||||||
and amortization of $246,965 and $244,268
|
18,122 | 20,819 | ||||||
Other assets
|
49,653 | 49,653 | ||||||
Deferred income taxes
|
46,000 | 47,000 | ||||||
Total Assets
|
$ | 17,228,798 | $ | 17,164,564 | ||||
LIABILITIES AND EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts and other payables
|
$ | 1,204,797 | $ | 1,121,509 | ||||
Accrued expenses and other current liabilities
|
2,131,000 | 2,041,111 | ||||||
Advances from customers
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1,467,652 | 1,482,652 | ||||||
Total Current Liabilities
|
4,803,449 | 4,645,272 | ||||||
Commitments and contingencies | ||||||||
Equity:
|
||||||||
Preferred stock, $1 par value, authorized 500,000 shares; none issued.
|
- | - | ||||||
Common stock, $.01 par value, authorized 12,500,000 shares; issued 3,114,163 shares,
1,980,062 and 1,983,662 outstanding
|
31,142 | 31,142 | ||||||
Additional paid-in capital
|
5,102,868 | 5,102,868 | ||||||
Retained earnings
|
20,702,670 | 20,796,104 | ||||||
25,836,680 | 25,930,114 | |||||||
Less: Treasury stock, 1,134,101 and 1,130,501 shares, at cost
|
13,448,663 | 13,432,092 | ||||||
Total TSR, Inc. Equity
|
12,388,017 | 12,498,022 | ||||||
Noncontrolling Interest | 37,332 | 21,270 | ||||||
Total Equity | 12,425,349 | 12,519,292 | ||||||
Total Liabilities and Equity.
|
$ | 17,228,798 | $ | 17,164,564 |
2012
|
2011
|
|||||||
Revenue, net
|
$ | 11,288,445 | $ | 11,373,095 | ||||
Cost of sales
|
9,438,746 | 9,462,631 | ||||||
Selling, general and administrative expenses.
|
1,962,826 | 1,802,279 | ||||||
11,401,572 | 11,264,910 | |||||||
Income (loss) from operations
|
(113,127 | ) | 108,185 | |||||
Other income (expense):
|
||||||||
Interest and dividend income
|
3,063 | 3,762 | ||||||
Unrealized loss on marketable securities, net.
|
(808 | ) | (1,904 | ) | ||||
Income (loss) before income taxes
|
(110,872 | ) | 110,043 | |||||
Provision (benefit) for income taxes. | (37,000 | ) | 47,000 | |||||
Consolidated net income (loss) | (73,872 | ) | 63,043 | |||||
Less: Net income attributable to noncontrolling interest | (19,562 | ) | (15,857 | ) | ||||
Net income (loss) attributable to TSR, Inc.
|
$ | (93,434 | ) | $ | 47,186 | |||
Basic and diluted net income (loss) per TSR, Inc. common share
|
$ | (0.05 | ) | $ | 0.02 | |||
Weighted average number of basic and diluted common shares outstanding
|
1,981,350 | 2,019,084 |
Shares of
common
stock
|
Common
stock
|
Additional
paid-in
capital
|
Retained
earnings
|
Treasury
stock
|
Non-
controlling
Interest
|
Total
equity
|
||||||||||||||||||||||
Balance at May 31, 2011
|
3,114,163 | $ | 31,142 | $ | 5,102,868 | $ | 20,858,282 | $ | (13,279,263 | ) | $ | 42,165 | $ | 12,755,194 | ||||||||||||||
Net income attributable to noncontrolling interest
|
- | - | - | - | - | 15,857 | 15,857 | |||||||||||||||||||||
Distribution to
noncontrolling interest
|
- | - | - | - | - | (3,500 | ) | (3,500 | ) | |||||||||||||||||||
Purchases of treasury stock
|
- | - | - | - | (2,340 | ) | - | (2,340 | ) | |||||||||||||||||||
Net income attributable to TSR, Inc.
|
- | - | - | 47,186 | - | - | 47,186 | |||||||||||||||||||||
Balance at August 31, 2011
|
3,114,163 | $ | 31,142 | $ | 5,102,868 | $ | 20,905,468 | $ | (13,281,603 | ) | $ | 54,522 | $ | 12,812,397 | ||||||||||||||
Balance at May 31, 2012
|
3,114,163 | $ | 31,142 | $ | 5,102,868 | $ | 20,796,104 | $ | (13,432,092 | ) | $ | 21,270 | $ | 12,519,292 | ||||||||||||||
Net income attributable to noncontrolling interest
|
- | - | - | - | - | 19,562 | 19,562 | |||||||||||||||||||||
Distribution to noncontrolling interest
|
- | - | - | - | - | (3,500 | ) | (3,500 | ) | |||||||||||||||||||
Purchases of treasury stock
|
- | - | - | - | (16,571 | ) | - | (16,571 | ) | |||||||||||||||||||
Net loss attributable to
TSR, Inc.
|
- | - | - | (93,434 | ) | - | - | (93,434 | ) | |||||||||||||||||||
Balance at August 31, 2012
|
3,114,163 | $ | 31,142 | $ | 5,102,868 | $ | 20,702,670 | $ | (13,448,663 | ) | $ | 37,332 | $ | 12,425,349 |
2012
|
2011
|
|||||||
Cash flows from operating activities:
|
||||||||
Consolidated net income (loss)
|
$ | (73,872 | ) | $ | 63,043 | |||
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
2,697 | 2,365 | ||||||
Unrealized loss on marketable securities, net.
|
808 | 1,904 | ||||||
Deferred income taxes
|
1,000 | 1,000 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
138,998 | 210,062 | ||||||
Other receivables
|
160 | (360 | ) | |||||
Prepaid expenses
|
55 | (2,087 | ) | |||||
Prepaid and recoverable income taxes.
|
(39,580 | ) | 27,671 | |||||
Accounts and other payables and accrued expenses and other current liabilities
|
173,177 | 225,984 | ||||||
Advances from customers
|
(15,000 | ) | (24,806 | ) | ||||
Net cash provided by operating activities.
|
188,443 | 504,776 | ||||||
Cash flows from investing activities:
|
||||||||
Proceeds from maturities of marketable securities.
|
500,000 | 1,749,090 | ||||||
Purchases of marketable securities
|
(3,237,267 | ) | (749,848 | ) | ||||
Purchases of equipment and leasehold improvements
|
- | (6,220 | ) | |||||
Net cash provided by (used in) investing activities
|
(2,737,267 | ) | 993,022 | |||||
Cash flows from financing activities:
|
||||||||
Purchases of treasury stock. | (16,571 | ) | (2,340 | ) | ||||
Distribution to noncontrolling interest.
|
(3,500 | ) | (3,500 | ) | ||||
Net cash used in financing activities
|
(20,071 | ) | (5,840 | ) | ||||
Net increase (decrease) in cash and cash equivalents
|
(2,568,895 | ) | 1,491,958 | |||||
Cash and cash equivalents at beginning of period
|
7,514,749 | 4,645,854 | ||||||
Cash and cash equivalents at end of period
|
$ | 4,945,854 | $ | 6,137,812 | ||||
Supplemental disclosures of cash flow data:
|
||||||||
Income taxes paid
|
$ | 1,000 | $ | 18,000 | ||||
1.
|
Basis of Presentation
|
2.
|
Net Income (Loss) Per Common Share
|
3.
|
Cash and Cash Equivalents
|
August 31, 2012
|
May 31, 2012
|
|||||||
|
|
|||||||
Cash in banks
|
$ | 4,548,797 | $ | 4,665,956 | ||||
Money market funds
|
397,057 | 2,848,793 | ||||||
$ | 4,945,854 | $ |
7,514,749
|
4.
|
Revenue Recognition
|
5.
|
Marketable Securities
|
August 31, 2012 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
US Treasury Securities | $ | 999,267 | $ | - | $ | - | $ | 999,267 | ||||||||
Certificates of Deposit | - | 2,238,000 | - | 2,238,000 | ||||||||||||
Equity Securities | 19,864 | - | - | 19,864 | ||||||||||||
$ | 1,019,131 | $ | 2,238,000 | $ | - | $ | 3,257,131 | |||||||||
May 31, 2012 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
US Treasury Securities | $ | - | $ | - | $ | - | $ | - | ||||||||
Certificates of Deposit | - | 500,000 | - | 500,000 | ||||||||||||
Equity Securities | 20,672 | - | - | 20,672 | ||||||||||||
$ | 20,672 | $ | 500,000 | $ | - | $ | 520,672 |
August 31, 2012
Current
|
Amortized
Cost
|
Gross
Unrealized
Holding
Gains
|
Gross
Unrealized
Holding
Losses
|
Recorded
Value
|
||||||||||||
US Treasury Securities
|
$ | 999,267 | $ | - | $ | - | $ | 999,267 | ||||||||
Certificates of Deposit
|
2,238,000 | - | 2,238,000 | |||||||||||||
Equity Securities
|
16,866 | 2,998 | - | 19,864 | ||||||||||||
$ | 3,254,133 | $ | 2,998 | $ | - | $ | 3,257,131 |
May 31, 2012
Current
|
Amortized
Cost
|
Gross
Unrealized
Holding
Gains
|
Gross
Unrealized
Holding
Losses
|
Recorded
Value
|
||||||||||||
Certificates of Deposit
|
$ | 500,000 | $ | - | $ | - | $ | 500,000 | ||||||||
Equity Securities
|
16,866 | 3,806 | - | 20,672 | ||||||||||||
$ | 516,866 | $ | 3,806 | $ | - | $ | 520,672 |
6.
|
Fair Value of Financial Instruments
|
7.
|
Stockholders’ Equity
|
8.
|
Other Matters
|
9.
|
Recent Accounting Pronouncements
|
Part I. |
Financial Information
Item 2.
|
(Dollar amounts in thousands) | ||||||||||||||||
Three Months Ended | ||||||||||||||||
August 31, 2012 | August 31, 2011 | |||||||||||||||
Amount
|
% of
Revenue
|
Amount
|
% of
Revenue
|
|||||||||||||
Revenue, net
|
$ | 11,289 | 100.0 | % | $ | 11,373 | 100.0 | % | ||||||||
Cost of sales
|
9,439 | 83.6 | % | 9,463 | 83.2 | % | ||||||||||
Gross profit
|
1,850 | 16.4 | % | 1,910 | 16.8 | % | ||||||||||
Selling, general and administrative expenses
|
1,963 | 17.4 | % | 1,802 | 15.8 | % | ||||||||||
Income (loss) from operations
|
(113 | ) | (1.0 | )% | 108 | 1.0 | % | |||||||||
Other income, net
|
2 | 0.0 | % | 2 | 0.0 | % | ||||||||||
Income (loss) before income taxes
|
(111 | ) | (1.0 | )% | 110 | 1.0 | % | |||||||||
Provision (benefit) for income taxes
|
(37 | ) | (0.3 | )% | 47 | 0.4 | % | |||||||||
Consolidated net income (loss)
|
$ | (74 | ) | (0.7 | )% | $ | 63 | 0.6 | % |
ISSUER PURCHASES OF EQUITY SECURITIES | ||||||||||||||||
Period | Total Number of Shares (or Units)Purchased | Average PricePaid per Share(or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Number Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchase Under the Plans or Programs | ||||||||||||
June, 2012 | 1,300 | $ | 4.72 | 1,300 | 76,618 | |||||||||||
July, 2012 | 2,300 | $ | 4.54 | 2,300 | 74,318 | |||||||||||
Aug, 2012 | 0 | N/A | 0 | 74,318 | ||||||||||||
Total | 3,600 | $ | 4.60 | 3,600 |
(a).
|
Exhibit 31.1 – Certification by J.F. Hughes pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Exhibit 31.2 - Certification by John G. Sharkey pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Exhibit 32.1 – Certification by J.F. Hughes pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Exhibit 32.2 – Certification by John G. Sharkey pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
Exhibit 101 – The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended August 31, 2012, formatted in Extensible Business Reporting Language (XBRL): (i) the Balance Sheets, (ii) the Statements of Income, (iii) the Statements of Equity, (iv) the Statements of Cash Flows, and (v) the Notes to Financial Statements. *
|
TSR Inc.
|
||
(Registrant)
|
||
Date: October 9, 2012 | /s/ J.F. Hughes | |
J.F. Hughes, Chairman and President
|
||
Date: October 9, 2012 | /s/ John G. Sharkey | |
John G. Sharkey, Vice President Finance and Chief Financial Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of TSR, Inc.;
|
2.
|
Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation;
|
d.
|
disclosed in this Quarterly Report any change in registrant’s internal controls over financial reporting that occurred during the registrant’s most recent fiscal quarter that materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
a.
|
all significant deficiencies or material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
Date: October 9, 2012 | |||
|
By:
|
/s/ J.F. Hughes | |
Chairman of the Board, | |||
Chief Executive Officer and Director |
2.
|
Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and we have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation;
|
d.
|
disclosed in this Quarterly Report any change in registrant’s internal controls over financial reporting that occurred during the registrant’s most recent fiscal quarter that materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
a.
|
all significant deficiencies or material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
Date: October 9, 2012 | |||
|
By:
|
/s/ John G. Sharkey | |
Vice President-Finance | |||
and Chief Financial Officer |
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
/s/ J.F. Hughes | ||
Chairman of the Board, | ||
Chief Executive Officer | ||
and Director | ||
October 9, 2012 | ||
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
/s/ John G. Sharkey | ||
Vice President-Finance | ||
and Chief Financial Officer | ||
October 9, 2012 | ||
Cash and Cash Equivalents
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents |
The Company considers short-term highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents were comprised of the following as of August 31, 2012 and May 31, 2012:
|
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M$=HI47]X2UDBT^RF&H2#"9'6DZ:'J`;@3M7'=JG*.9$(4